Entrepreneurship drives broad prosperity

Why would entrepreneurship be unworthy of a university? A healthy entrepreneurial spirit can actually yield the best things, says assistant professor Werner Liebregts. For current and future generations.

Some time ago, a piece written by Professor Juliëtte Schaafsma appeared on Univers Online with the provocative title “Entrepreneurship clashes with the university’s core values” (unfortunately, in Dutch only). A particularly striking observation, because the university itself states that an entrepreneurial spirit is one of the crucial conditions for developing your character towards the four core values of the university (curious, connected, caring and courageous).

Schaafsma rightly says that entrepreneurship is often poorly defined, but then also does not get beyond a very one-sided, caricatured, and stereotypical image herself. According to her, entrepreneurship is almost equal to corruption, fraud, and relentless growth, purely for the entrepreneurs’ own benefit and always at the expense of (vulnerable people in) society and/or our world as a whole. Therefore, it is about time for further clarification and some nuance based on the scientific literature.

The entrepreneur does not exist

Above all, the entrepreneur does not exist. Research has shown time and again that entrepreneurs form a very heterogeneous group of individuals. The ambitious, growth-oriented founder of a startup is an entrepreneur. The owner of an established (small and medium-sized) enterprise is an entrepreneur. The solo self-employed individual or freelancer is an entrepreneur.

But also what we have come to call bogus self-employed are entrepreneurs. At least, when we take their registration with the Chamber of Commerce as a starting point. Based on this, self-employed individuals and employees are treated quite differently in legal and fiscal terms. However, the boundaries of this dichotomy are increasingly blurred.

On the one hand, not all self-employed individuals act as entrepreneurial as one typically expects of entrepreneurs. That is, they are not innovative and/or growth-oriented. On the other hand, there is a large group of workers with a paid job, who pursue innovative activities for their employers. These so-called entrepreneurial employees or intrapreneurs develop new products or services within the context of an established business. Such entrepreneurial behavior of employees is increasingly valued by employers, spurred by globalization and technological development.

Being a successful entrepreneur

Widely used definitions of entrepreneurship take this into account, either implicitly or explicitly. For example, entrepreneurship could be about “the discovery, evaluation, and exploitation of opportunities to create future goods and services”. This can be done either by setting up an entirely new business (as an independent entrepreneur) or by developing a new business activity within an existing business (as an entrepreneurial employee).

Other definitions mention both possibilities more explicitly. For example, one can think of entrepreneurship as “acts of organizational creation, renewal or innovation that occur within or outside an existing organization”. But, whichever of the aforementioned forms of entrepreneurship we are talking about, they all require a certain level of entrepreneurial mindset or spirit in order to be successful.

Contributing to society

Hence, entrepreneurship is omnipresent in society. It takes place within new and established organizations, of both public and private nature, and it is practiced by both independent entrepreneurs and entrepreneurial employees. All these different forms of entrepreneurship make important contributions to that same society to a greater or lesser extent. Entrepreneurial individuals innovate, create jobs, drive labor productivity, and hence, economic growth. All this at least improves our economic or material prosperity.

Having said that, an entrepreneurial spirit and skills can also be utilized in a negative way. In this regard, the late William Baumol once made a very valuable distinction between productive and unproductive entrepreneurship.

An obvious example of unproductive or even destructive entrepreneurship is organized crime. Criminals are often extremely entrepreneurial, but that is not quite the type of entrepreneurship a society strives for. Corruption and fraud are also good examples of this. We benefit, however, from entrepreneurs who engage in socially valuable activities.

So, the question is not whether we should embrace entrepreneurship – we should, without a doubt – but how we can ensure that entrepreneurial talents use their knowledge and skills in a way that is productive for society (or at least not destructive). That is, in such a way that an increase in our economic prosperity is achieved while respecting ecological limits, and in a socially inclusive manner.

Then we talk about so-called broad prosperity, an approach that also includes intangibles like happiness and well-being, of both current and future generations. Social forms of entrepreneurship contribute to a society’s broad prosperity almost by definition, but – mind you – social entrepreneurs also need a good dose of entrepreneurial spirit in order to survive or even grow.

The role of the university

In short, it is far too simplistic to dismiss the promotion of entrepreneurship or an entrepreneurial spirit as “unworthy for a university” or that it is even contrary to fundamental academic values. Instead, entrepreneurship is very much worth pursuing as an important driver of (broad) prosperity. It is true though that this heavily depends on the forms of entrepreneurship that we (as a university) generate. We should therefore shift our focus from quantity to quality, with high-quality entrepreneurship comprising activities that lead to social value creation.

In that respect, the university can still take an important step, Schaafsma and I undoubtedly agree. After all, it does not become clear from Tilburg University’s strategic plan who should think and act in an entrepreneurial way, in what way(s) and what role the university plays in this. I therefore propose to organize a new series of strategic sessions, the minutes of which are neatly shared with all attendees afterwards. Will colleague Schaafsma then join again?

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